TAXATION OF FARMERS

Taranaki Daily News, 16 August 1929, Page 16

TAXATION OF FARMERS

OBJECTION TO PROPOSALS “OTHER SOURCES OF REVENUE.” GOVERNMENT ECONOMY URGED. A strong protest against the proposed amendments of land and income tax as throwing an inequitable burden on the farming community, was made at a special meeting yesterday of the South Taranaki Farmers’ Union executive. It was considered that other avenues should be explored to balance the deficit in the Budget. The meeting suggested that before the burden of taxation was further increased some drastic effort should be made to curtail the ever-increasing cost of Government administration. The meeting was held to discuss the Government’s proposals to increase the land tax by way of graduated /supertax, to reduce the amount of mortgage exemption, to increase the primage duty and to make farming incomes assessible for income tax.

The secretary, Mr. E. K. Cameron, explained that the last-named proposal would mean payment of land or income tax would be according to which was the greater; a farmer would be penalised °in a boom year. The super-tax would not be felt greatly in Taranaki as there were not many estates above £12,500 unimproved value. The primage duty it was proposed to increase from 1 to 2 per cent. Mr. J. P. Marx said primage duty was originally brought in as a war mcasuie. It had been said it would be taken off’ when it was not needed, “but these things never disappear.” There were large commercial concerns not being touched, said Mr. Cocker. He understood that city land did not come into the picture at all. The proposal meant mortgages were going to be counted as assets and taxed, said°Mr. H. I. Crocker. This was becoming a bit hard. The chairman: They are always telling us to get back on the land. TARANAKI NOT AFFECTED. Mr. Cocker considered the proposals did not affect Taranaki, still they should protest on behalf of others. He referred to sheep land in the South Island which had to be held in large areas owing to its low carrying capacity. It was not practicable to cut this up, yet it was going to be taxed and super-taxed. He considered the lowered mortgage exemption was the thin end of the wedge. Farmers were going to bear the whole brunt of the extra taxation. The primage duty would not amount to a great deal of money, but it was expected to obtain a good deal extra from the farmers. The farmers would pay their share of primage duty and would also feel the effects of the lowered mortgage exemption. The business man could pass on the extra cost of his primage duty. Mr. Cocker thought this would be used as an excuse for extra profits. They would not pass on the 1 per cent, but would add more. Mr. Marx urged that before the Government attempted to exploit the farmers further in taxation it ought to curtail Government expenditure. Farmers should call on their members of Parliament to see if something could be done

to curtail expenditure. Mr. «A. L. Jennings said it seemed to him that farmers paid income tax indirectly on their investments. Mr. Cocker considered there should be exemptions from the super-tax for large areas carrying a large number of families. THE PROPOSAL “VICIOUS.” Mr. \V. Jones expressed the view that the land tax was a distinct handicap. A better method of raising revenue was by means of income tax. He described as vicious the proposal to tax whichever was greater, income or land tax. They should protest against the attempt to have both; either it should be a land tax, or an income tax. In a bad season the land tax often meant that a farmer had to borrow money to pay his tax. Mr. Jones objected very strongly to the increase in primage. The man with a family would pay more than the single man. The tax should be judged on a man’s ability to pay. Alter making a good income one was in the best position to pay tax. Farmers wanted no special privileges, but they wanted to be on the same basis as others.

Mr. Marx favoured retaining the land | tax; otherwise farmers might buy more j land and aggregate their holdings to escape taxation. Mr. Jones: But if a man made any income or profit with which to buy a farm he would have to pay tax on this income. Mr. Marx said he did not see that the Farmers’ Union could support a resolution to do away with land tax altogether. This would drive land into big I holdings. j Mr. E. J. Booth suggested that differentialion be made between large areas of poor land and large areas of good land. Bit FAKING UP BIG ESTATES. Mr. 0. Robertson approved of many principles of the Act. The object of the Government seemed (o be to "burst up” big estates and that seemed right. New Zealand required closer settlement. Population was needed on small areas ami Air. Robertson thought the super tax portion <d (he proposals would encourage that. 'there were other portions of the propo?ul- of which he did not approve, and it. was a question where to draw the lilm. Mr. 11. Thrush thought taxing the incomes if these wme the bigger would tend to keep production down. The chairman; It is not. a tux to increase pi odu. I mn. Mr. Ki.hei I .son remarked that the more income lax he hail to pay the better he would be pleased. Mr. J. A Pettigrew was opposed to any reduction of taxation on big estates. '1 he chairman .-.nd it was only a mat ler of time when all (he big estates would be cut lip. There were still areas of good land held in big blocks, said Mr. Jennings, and ilic small man was unable Io get hold of it. ■“SAI A | J. E A R b 1 I - N 1 0 \ E it 1 n Ex E.” The chairman ilmugkt thal Hie "small farm stunt” was being overdqpu. A man ami his wife on 50 acres would be working all their lives. A. man should jiave at least 100 acres. Mr. A. T. Sulzberger also coimidgred that 50 acres was not |>ig enough. Mr. Robertson referred to the larua

net returns made from a farm of 20 acres at Hurleyville. It was not that the areas were too small, it 'was the price that was paid for the land. Mr. Crocker favoured small areas. Very often a man was holding 200 or 300 acres and keeping a family of sharemilkers of perhaps two. Mr. Robertson considered larger farms might be better for the individual, but smaller farms were better for the State.

Mr. Sulzberger: The Hurleyville man manured intensely. Will the land stand up to that afterwards? Mr. Cocker: It is the principle of the thing we are up against, of farmers having to bear the brunt of taxation. It is unfair. I feel strongly that the Minister of Finance is putting the whole of the burden on the farming community. Primage duty will hit the farmers most.

Mr. Marx: I think the Government should he called on to reduce expenditure.